Buying a new or used car is one of the larger purchases you are likely to make within any 2-3 year period of time. Coming up with the money to finance your purchase may be something that is easy for you. Or, maybe you are even prepared to pay cash for your purchase.

However, if you are like most people these days, you will need to finance some or all of your new or used car purchase. Fortunately, there are a number of car financing options available to you. Choosing the best car financing is a matter of knowing your options and being able to compare which option is right for you.

Here is an overview of the best car financing options:

Cash

Cash may very well be the best car financing option. But, having $30,000 or more on hand to buy a cherry new car is not within the means of most people. And, even if you do have this kind of money on hand, you may be better off sinking that money into another type of investment vehicle and then taking out a loan for the car purchase.

Short-Term of Long-Term Car Financing

Traditional auto loans have terms of 5 or even 7 years. But, some car lenders now offer loans of up to 12 years. The longer period means lower monthly payments but more money paid over the life of the loan.

Leasing

A lease on your car basically amounts to renting it. The advantage is little or no money down at the beginning of the lease, and usually your monthly payments are lower. However, at the end of the lease, you will not own the car: a distinct disadvantage as compared to buying.

Home Equity Loan

If the value of your home is higher than the amount you owe the bank on your mortgage, you have some equity in your home. It’s a good idea to save this equity for a “rainy day,” but it is entirely possible to take out a home equity loan and use it to finance your classic car.

Credit Union or Local Bank

Credit unions and small, local banks are bucking the “big bank” trend. They can be a pleasure to do business with – and not just because they are more friendly when you walk through the door. Credit unions and local banks often have great deals on auto loans and are worth taking a look at. They are also usually a bit more flexible than are larger banks in terms of the deals they will structure for you.

Personal Loan

If you only need about $5,000 or less to finance your purchase, consider taking out a personal loan. These are a type of unsecured loan, meaning that you do not need to put up any collateral against the loan. The drawback is the small principle you can borrow, as well as higher interest rates.

Unsecured Line of Credit

A line of credit lets you take out a loan amount that you need without having to come to an agreed-upon amount ahead of time. You can borrow some now, pay part of it back, and then borrow more later. The drawbacks are high interest rates.

Choose the best car financing for you – and enjoy the pride of ownership you will feel as you show off your newly-purchase new or used car.